| In this paper, we analyze the structural change in the supply chain of oil palm in North Sumatra, Indonesia, especially after the financial crisis of the late 20th century. We first describe the past and present market structure and conduct of oil palm industries in North Sumatra with an industrial organization approach based on our field study. The analysis reveals that the supply chain of oil palm in North Sumatra has changed such that farmers had more power to determine FFB prices over crushing companies, especially from 2001 through 2004. However, farmers lost bargaining power during 2007-2008 due to a decrease in palm oil demand, plunging of palm oil prices, and a regulation imposed upon crushing companies by the Ministry of Agriculture. To analyze... |
